Good afternoon, everyone. On behalf of Simulations Plus, I welcome you to our Fourth Quarter Fiscal Year 2020 Financial Results Conference Call and Webinar. Hosting the call today is Simulations Plus’ CEO, Shawn O’Connor; and the company’s CFO, John Kneisel. An opportunity to ask questions will follow today’s presentation. [Operator Instructions] Before beginning, I’d like to remind everyone that with the exception of historical information, the matters discussed in this presentation are forward-looking statements that involve numerous risks and uncertainties. The actual results of the company could differ materially from those statements. Factors that can cause or contribute to such differences include, but are not limited to, continued demand for the company’s products, competitive factors, the company’s ability to finance future growth, the company’s ability to produce and market new products in a timely fashion, the company’s ability to continue to attract and retain skilled personnel and the company’s ability to sustain or improve the current levels of productivity. Further information on the company’s risk is contained in the company’s quarterly and annual reports and filed with the Securities and Exchange Commission. With that said, I’d like to turn the call over to CEO, Shawn O’Connor. Shawn? Shawn O’Connor: Thank you, Cameron. Fiscal 2020 was a milestone year for Simulations Plus. We achieved all our stated goals. We accelerated organic revenue growth from the historical 10% level to our 15% to 20% target range. Overall, fiscal year 2020 total revenue growth was 22% and organic revenue growth excluding Lixoft was 18% for the year. This was achieved despite the disruption to our marketplace that came with the COVID pandemic. We’ve made a significant acquisition to expand our software business and grow our European presence. And we completed a strategic offering, giving the company resources in scale to pursue additional acquisitions,…

Thank you, Shawn, and good afternoon to everyone. Our consolidated net revenues for the fourth quarter of fiscal year 2020 were up 19% to $9.5 million compared to $8 million in the prior year quarter. On an organic basis, which excludes Lixoft acquisition, our revenue grew 7%. As Shawn indicated, organic growth was lower primarily due to four clients reducing licenses as a result of acquisitions site consolidations and layoffs. In addition, last year, the fourth quarter saw sales that were expected to close in the third quarter, instead slipped into the fourth quarter. As well, our DILIsym division of consulting revenues came in higher than normal, a certain projects accelerated into Q4 2019 that have been expected to be delivered in the 2020 fiscal year, sorry about that. Both ultimately affected the growth rate in the fourth quarter. The general sectors we offered in, software and life science, pharmaceutical have tended to maintain momentum in the midst of the pandemic. So, as Shawn mentioned, we faced modest headwinds in securing new accounts, and we’ve experienced some smaller renewals due to site consolidations that some of our customer sites. Consolidated software and software-related sales increased $919,000 or 24% over the fourth quarter of 2019. Lixoft software sales accounted for this increase is organic sales were relatively flat during the period. Consolidated consulting and analytical studies increased about $600,000 or 14% over the prior year. Cost of revenues increased 17% or $384,000, resulting mainly from increases in labor related costs, which were partially offset by a decrease in direct expenses on contracts as less of the consulting projects required lab testing during this quarter. In addition, we saw lower customer training related costs as most training was completed virtually due to COVID restrictions. Total gross profit increased 20% to $6.9 million,…

Thank you, Shawn. [Operator Instructions] The first question is from Matt Hewitt with Craig-Hallum. You might be muted, Matt? We’ll move on to the next question. The next question is from Curtis Scott [ph]. Shawn O’Connor: Are you on?

I’m on. Thank you. Wonderful report. My question is a very general one as an investor and maybe it’s too broad. But the question is, how does Simulations Plus plan to use 5G and quantum computing to improve its products. Shawn O’Connor: Curtis, thanks for joining us today and appreciate your long-standing tenure and support the company.

My pleasure. Shawn O’Connor: Well, those two technologies contribute to increased processing power and speed. And I can’t say that we’re leveraging those two individually. But the speed of our processing of our analysis, our simulations is an important factor. We have historically delivered well in that regard. And in many bake-offs and competitive sort of analysis always come out on top. I mean during this last year, one of the key features or improvements in the ADMET Predictor and specifically the AIDD module were improvements made in terms of the processing and our ability to analyze molecule accounts on a fast pace and that certainly is accruing to our clients. We utilize multi-core processing capabilities. We have the ability to ourselves or for our clients to access the web services to reach out and garner more horsepower. Our clients, their internal IT departments provide that sort of infrastructure as well. So we’re well positioned as we speak today, and we’ll always look to keep improving in that regard going forward. It does not seem to be a gating item at this point based upon input for clients, but always pushing the edges to do it bigger, better and faster.

Great and good to hear.

Thank you. [Operator Instructions] I will go to some of the written questions that we have that were sent in. First one is from Howard Halpern. Are there any internal expansion initiatives that you’re looking to advance such as development of your own Malu library and/or expand your artificial intelligence capabilities into new product offerings outside of drug development. Shawn O’Connor: Thanks, Howard. We have a R&D strategy and are looking at both the advancement of our existing products as well as extensions thereof like that which we delivered this past year with the AIDD module, and always exploring other areas. Our focus in the health care market is pretty strong. It’s a market that requires a lot of domain experience in order to apply modeling and simulation technologies, techniques and that is where the vast majority of our business is. Obviously, the value of the AI and data mining technology that we developed may have benefits elsewhere. And in those adjacent markets to our business and the consumer agribusiness area, we do have some clients in that space. And there may be value for that technology in the long run in other markets. We’ve got a lot of opportunity in the market we play in right now and focus our efforts pretty much in that arena.

Thank you, Shawn. We do have one additional question here as far as the written questions. With the recent capital raise, what is your current acquisition strategy? What are you looking for as an acquisition target at this point? Shawn O’Connor: Well, as I pretty consistently stated out there, we’re looking for acquisitions that can increase our offering to our clients and the value of the modeling and simulation suite of products as well as services that we can offer to them to enhance our position as a strategic vendor for them. So our targets out there are acquisition opportunities consist both in the software side as well as the service side number of products out there that fit into the continuum of modeling and simulation through the drug development cycle. Some of them are small, probably medium size. Many of them are small, which would add functionality to our existing products, a number of opportunities in that direction. On the service side, the opportunity is to accelerate the expansion of our capacity. But probably more importantly, strategically from a geographical point of view. We don’t have too many boots on the ground in Europe, and consulting staff in the Asian markets as well as the expansion of the types of services that we can offer. We brought a new service offering to the market this past year with the regulatory services by the hiring of Sandra Suarez-Sharp. That as an example is achievable through acquisition as well in terms of practices that offer a type of service in the umbrella of modeling and simulation that we don’t currently offer to the marketplace. So, I’m looking for opportunities that fit in from a culture point of view, from a product to the client point of view, but always underlying that companies that are accretive in nature and can be acquired at an appropriate valuation. That’s the framing of our work effort on the M&A side right now.

Thank you, Shawn. I do have Matt Hewitt with Craig-Hallum for the next question. I’ve got his line now. [Operator Instructions] Matt, you are live.

All right. Thanks so much and congratulations on achieving all of your targets for the year. So that’s especially given the environment, that’s not an easy task. Maybe first up regarding the – you are almost done with the first quarter here yet we’re also seeing a spike in coronavirus in many parts of the country. Maybe what are you seeing here in the first quarter? Are you seeing that normal seasonality, where things start to pick up a little bit or because of the pandemic or is it still – are there still some puts and takes that you’re having to deal with? Shawn O’Connor: Well, yes, fair question, Matt, and welcome. I’m glad you got the pin. It’s good to hear your voice. I was imagining what your question would be. COVID has certainly reared its head and we’re seeing step back and lockdown and other responses around the world. I would characterize this as being an ongoing existing situation. I don’t think it’s overly exaggerated by recent events, France locking down over the last few weeks, as an example. Operationally, our group at Lixoft is under that lockdown continue to work well, work from home. From a customer point of view, I think we were operating in diminished stability to reach out and visit and meet with our clients face-to-face. This is conference season for our industry as well. And so we’ve – those conferences have continued, but on a virtual format, which has provided some opportunity to interact within our industry, within our clients, but not fully as functional as a on-site conference situation. So I wouldn’t say that anything of recently has changed it – it’s what we’ve been experiencing, though, for really since the March time frame of this year. So we continue for the one benefit, I think, is that the calendar year brings those budgetary cycles into play for our clients. And those budgetary cycles are playing out. They’re affected by COVID in terms of their allocation to therapeutic areas, therapeutic programs. But it’s a worthy endeavor from our perspective in the sense that upon the completion of those processes, they’ve established and set their budgets and we operate with a little bit more certainty as opposed to the last number of months have been uncertain as to what the budget impacts are going to be. I’m always optimistic that you go through these cycles and then all the answers are there. I’m sure some cautiousness and wait and see will continue forth into the future, but I think it will bring some more definitive answers and game plans on the part of our clients for that we can respond to. So toward the answer to your question is that while the environment externally has seemed to tick up in terms of COVID, I would say that for the most part, it’s the same as we’ve been experiencing since March.

Got it, okay. Thank you. And then shifting gears a little bit, I think you mentioned during your prepared remarks that at least on the consulting side, you had increased your staff by roughly 22% during the year. I’m just curious, as your business continues to grow and expand. What does the talent pool look like? Are you still able to find the right people? And how is as bioinformatics, I guess, more broadly modeling as well, but as bioinformatics becomes a relatively hot market. It seems as of late. Are you competing with others? What has that done from a cost perspective, any color along those lines? Shawn O’Connor: Yes, fair enough. It is a competitive market for the profile of scientists that we need in order to support our consulting efforts, support our software development side of our businesses as well and has been – always been competitive to the benefit, though, there certainly are more candidates of that profile available today than in the past. But still, it’s a relative shortage in terms of the need out there that need that is sourced both from ourselves and our clients really looking for the staff. It does put pressure on the compensation side. It always has. But as you can see, we’ve held our margin pretty well in the consulting business pretty consistently at that 63% mark. So we are able through efficiencies and passing on the cost to our clients, maintain our margins in that arena. So it continues to be a priority for us, a very important component of our business, our ability to attract new people. But I’ve been very positive about our results and attracting some very significant people from academia in terms of people coming out to the marketplace from that world – from an industry where we cautiously, occasionally hire very good candidates from existing or potential clients out there. And as well, others that compete with us for candidates and source some people from other consulting or other vendors to the industry. So we’ve fared pretty well in this regard and look forward to continuing that effort, it’s an important one for us, but we’ve been able to meet our needs to date, and I fully anticipate that we’ll be able to meet our needs tomorrow and into the future.

That’s great. And then one last one for me and then I’ll hop back in the queue. I think you had a slide commenting on a couple of successes you had during the quarter where you announced via press release that both with the FDA and getting drugs approved or drugs that may be competing drugs had failed and you were able to help a client get something through and to approval. Maybe – what – is it possible to quantify the importance of those types of events? And I mean, if you look at historically, can you tie those types of events with an uptick or an increase in adoption within quarters or within a year or two of something like that happening? And what does – do these recent success stories maybe mean for fiscal 2021 and 2022 as you look out over the next couple of years? Thank you. Shawn O’Connor: Sure, Matt. Maybe if we dedicated a few of our scientists to modeling the announcements in the follow-on effects, maybe I’d be in better position to answer the question on a metric basis. I can say this, but these are the types of announcements that garner the attention in industry, our clients in terms of the value. And yes, it’s been a very successful quarter in regard to some of the impacts that DILIsym has had on very specific drugs. The advancement of drugs to the market that otherwise may not have even made it into clinical, Phase 3 clinical trials. How do you calculate the ROI there? Well, you can take that entire drug’s revenue stream and say that may not have existed had it not been for the confidence that we were able to provide the client and taking that drug into clinic. So…

Thank you, Shawn. That appears to be out of questions today. I’ll turn it back over to you for follow-up comments. Shawn O’Connor: Very good. Well, I appreciate everyone’s attention. Be safe, everyone, and I look forward to – yes, we are well through our first quarter, and I look forward to reporting to you very soon first quarter fiscal year 2021 results in January. Take care, everyone.

And this does conclude today’s conference call and webinar. If you missed any part of today’s presentation, the replay will be available at our website, www.simulations-plus.com. Thank you.